Back4G data to trigger next big ad war
Media buyers expect Airtel, Vodafone and R-Jio to spend millions of dollars on ads over the next few months
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The launch of high-speed 4G data services is set to become the next high-stakes battleground for telecom companies, and media buyers are expecting operators such as Bharti Airtel Ltd, Vodafone India Ltd and Reliance Jio Infocomm Ltd (R-Jio) to spend millions of dollars on advertising over the next few months to grab market share.
“It will all depend on what (Reliance) Jio’s plans are. While an advertising war is inevitable, you will see the maximum action when Reliance plays its cards. All advertising will peak at that time," said a person who in his previous job helped Bharti Airtel formulate its media plan. The executive declined to be named.
It’s easy to understand why media buyers are salivating at the prospect of a reprise of the ad wars between telecom companies. Bharti Airtel, the only telecom operator to offer 4G services in India so far, is already promoting its services with an aggressive marketing campaign and media buyers expect ₹ 400-500 crore to be spent by the operators over the next three-six months.
“While it’s difficult to pinpoint exact amounts, on the basis of past spending patterns of key players one can expect the category to spend significantly," said Kartik Sharma, managing partner (South Asia) of Maxus, a unit of media buying agency GroupM. The agency’s clients include Airtel, Vodafone and Idea Cellular Ltd, split across different group companies including Maxus and Mindshare.
Ashish Bhasin, chairman and chief executive (South Asia) at Dentsu Aegis Network, estimates that telecom companies will collectively spend ₹ 750 crore on 4G ads. “There are several chapters to these telecom ad wars, dating right back to the start. In this 4G ad war, Airtel gets the prime-mover advantage since it has launched its campaign already. Spends will be targeted towards localized mediums like outdoor depending on the service area they operate in," he said.
Starting December, expect a bloodbath in advertising as the country’s second largest telecom operator Vodafone India and billionaire Mukesh Ambani’s R-Jio roll out their 4G services. Meanwhile, Idea Cellular has pushed its plans to 2016, the company said. “Idea has decided to initiate the launch of 4G services on LTE platform from calendar year 2016, in a phased manner," said a company spokesperson.
Vodafone India confirmed that it will launch its 4G services by 2015-end. The important data markets will be Mumbai, Delhi, Kolkata, Bengaluru and Kochi as part of the first wave of the rollout. “Our marketing and communication strategy will be in line with the discerning needs of the customers," the company said in an emailed statement.
R-Jio did not respond to an emailed query.
The intensity of this battle will depend on how each player is crafting its offers, added Sharma of Maxus. “One can also expect many product innovations in a very short period of time. At least in the beginning, the battle will be intense," he explained.
Telecom operators will have to make sure their claims are reliable and authentic as their brand image will be at stake. “The biggest factor is to ensure that every claim that a company makes is something which can be delivered, else one can expect a massive backlash and even the brand equity will get tarnished. The differentiators eventually are very marginal, so sticking to basics by delivering what’s promised is important," said Sharma.
So far, Bharti Airtel has been getting mixed reviews for its 4G services in the country. The company has not managed to cross the one million subscriber mark for 4G services after rolling it out in 296 towns and cities. Media buyers’ estimates suggest the company has spent ₹ 30 crore on the first phase of its four-six week campaign and will continue to dominate airwaves till December.
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